MGEB06H3 Lecture Notes - Lecture 3: Diminishing Returns, Accounting Equation, Growth Capital

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Real gdp per capital: this measures the country"s progress or its progress to other relative countries over time. And measures the economic growth in the long run to . Informs us how fast our income is changing over time. Long run economic growth is a gradual process in which real gdp per capita grows a few percent per year. The rule 70- this tells us how many years would it take for the variable to double. Looking at the factors that determine economic growth in the long run. To measure sustained economic growth by looking at the output per worker. A increase shows a high productivity (the only source of long run growth) a increase (ap)average product of labour (output of worker/hour): real gdp/#of workers in workers can also increase the real gdp per capita. Explaining growth in productivity: (affect productivity in the long run) Increase in physical capital- consists of human made resources such as, building and machines.

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